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COP27 heightens focus on conversion-free supply chains

23 noviembre 2022

The AFi attended COP27 to push for progress on essential pieces of the climate puzzle, including how to eliminate deforestation and ecosystem conversion in commodity supply chains.

COP27 heightens focus on conversion-free supply chains

After two weeks of talks, COP27 closed following a historic agreement to provide funding for loss and damage in countries most affected by climate change, but with little clear progress in putting the world on track for the 1.5°C target of the Paris Agreement.

The meeting kicked off just days after WRI’s State of Climate Action 2022 report announced that not one of the 40 indicators assessed was on track to meet 2030 targets, and that the annual rate of gross deforestation need to decline 2.5 times faster than the current rate to align with a 1.5°C pathway.

The Accountability Framework initiative (AFi) participated in the summit to push for more rapid progress on some of the essential pieces of the climate puzzle, most prominently how to eliminate deforestation and ecosystem conversion.

Amid frustrations with slow progress on climate action overall, COP27 provided some glimpses of hope for more concerted action on food systems and with the land sector.

The focus on no-conversion to deliver net zero targets is here to stay

This year the UN, as well as the US government and others, made it clear that companies must adopt robust net zero transition plans, and that those plans must include eliminating land use change from their supply chains.

The UN High-Level Expert Group (HLEG) on the Net-Zero Emissions Commitments of Non-State Entities published its recommendations to guide businesses, financial institutions, and other actors on how to set credible net zero pledges tied to a 1.5ºC pathway. The report emphasized the need to “avoid the conversion of remaining natural ecosystems— eliminating deforestation, wetland and peatland loss by 2025 at the latest, and the conversion of other remaining natural ecosystems by 2030.”

The Science Based Targets initiative (SBTi) provides the only target setting methodology that is in line with the recommendations of the UN HLEG, advancing the role of the SBTi as the foremost tool for robust emissions reduction targets. To achieve SBTi validation, companies engaged in a Forest, Land and Agriculture (FLAG) sector must set specific FLAG targets, which also entails committing to eliminating deforestation and ecosystem conversion from their supply chains.

Further bolstering the role of SBTi, the United States government announced the proposed Federal Supplier Climate Risks and Resilience Rule, which would require major federal contractors to publicly disclose their greenhouse gas emissions and climate-related financial risks, and set SBTi-aligned emissions reduction targets. The US government is the world’s largest buyer of goods and services, purchasing more than $630 billion in the last fiscal year.  All contractors would also be required to disclose through CDP, further mainstreaming transparency on corporate emissions.

Forest and Climate Leaders’ Partnership

This year’s summit also saw the formation of the Forest and Climate Leaders’ Partnership (FCLP), an initiative to strengthen the commitment to halt and reverse forest lost and degradation made by 140 countries at last year’s COP. The FCLP includes 26 countries and the European Union, which together account for over 33% of the world’s forests and nearly 60% of the world’s GDP. Members have mobilized billions of dollars to restore degraded land, tackle wildfires, and support the rights of indigenous communities. The group is also calling on all financial institutions to address deforestation as part of their net zero transition plans. However, the new partnership has been criticised by some, who claim it does not go far enough.

Carbon markets grapple with scope 3

The summit brought new attention to the question of how corporate actions to manage and account for their scope 3 emissions from the land sector—including the protection and restoration of forests and ecosystems within their supply chain— interact with land-based investments and projects that are linked to carbon markets. Discussion focused on the rules governing these markets, including markets governed by countries under Article 6 of the Paris Agreement. While several potential mechanisms are in development, there is as yet a lack of clarity on the ways in which carbon credits traded by governments and third parties interact with carbon removals in supply chains. In the meantime, there is broad agreement that companies should ensure that their investments in forests do indeed lead to increased levels of forest protection as well as benefits to producers and local communities. Supporting producers to avoid deforestation and ecosystem conversion is a no-regrets approach that will lead to reduced emissions and increased carbon sequestration within agricultural and forestry supply chains regardless of further developments in carbon market mechanisms.

Loss and Damage Finance

One of the major outcomes of the summit was the creation of a fund to address loss and damage caused by climate change and aid the countries most vulnerable to its effects. To start, governments will create a committee to make recommendations on how to implement these funding arrangements at COP28 in 2023. While there is well-warranted scepticism that this commitment will not be met—given that the 2009 goal of raising $100 billion annually to address climate change has not materialized—this funding has the potential to benefit many of the peoples and communities that are engaged in and impacted by commodity production in tropical regions.

AFi’s Statement on Agricultural Sector Roadmap

At the start of COP27, 14 major agricultural commodity traders and processors released an Agriculture Sector Roadmap to 1.5°C. The release follows the traders’ corporate statement of purpose issued at COP26, committing to “lay out a shared roadmap for enhanced supply chain action consistent with a 1.5 degrees Celsius pathway.”

In response, the AFi released a statement noting that the roadmap does not meet its primary aim of defining enhanced action in line with a 1.5 degree future, as it does not set forth a plan to eliminate land use change at a rapid enough pace or with a broad enough scope. The gaps are especially large in the roadmap’s implementation plan for the soy sector, which represents a step backward for many of the signatories. Therefore, individual companies will need to go further to achieve true 1.5 degree pathway, particularly by taking rapid action to address deforestation and conversion.

In case you missed it: Events hosted by AFi coalition members at COP27

Read what AFi coalition members have to say about COP27

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